Anonymous wrote:

Anonymous wrote:

Poor assumptions here. I was making sub 50k when my child was born with a mortgage and daycare that exceeded my income. No mater what, I've always had something going to retirement and a bit to a savings account and then I used credit. I figured at the least, I wouldn't live on cat food in my golden years. I didn't have enough to cover bills month to month. Even now, I'm well under 100K at a point where I make a dent in my debt each month. I'm broke by payday. I will be out of the hole a year from now, with 10 years of retirement saved. Happy with my philosophy. Yes, I live paycheck to paycheck.

There seems to be a difference between living "paycheck to paycheck" and being poor. Being poor is someone who cannot save and has absolutely no savings at all (retirement or otherwise). A person who is poor has absolutely no recourse for paying bills if they lose their job (no 401K or equity in house to borrow on). Apparently "paycheck to paycheck" means something like using your whole paycheck for expenses (including the retirement fund).

I think that if a person has substantial equity in their house and any savings accumulated, they have a buffer and are not poor. Maybe the question should be more about total net worth . . . like is your total net worth zero or less? ??

I'm the PP you quoted and agree with your assessment. To answer your question, I had a negative net worth for years because my property was (and still remains) underwater. However, my retirement savings has grown and my high consumer debt has been cut in half, so I have a positive net worth. If I lost my job, I'd be in trouble, as I have 401K loan that I couldn't pay in full. So, yes, I'm paycheck to paycheck, though I won't be a year from now.

To add, my consumer debt was as high as 30K at one point and I haven't cleared 100K (or close to it) in any of those years.

Anonymous wrote:

Poor assumptions here. I was making sub 50k when my child was born with a mortgage and daycare that exceeded my income. No mater what, I've always had something going to retirement and a bit to a savings account and then I used credit. I figured at the least, I wouldn't live on cat food in my golden years. I didn't have enough to cover bills month to month. Even now, I'm well under 100K at a point where I make a dent in my debt each month. I'm broke by payday. I will be out of the hole a year from now, with 10 years of retirement saved. Happy with my philosophy. Yes, I live paycheck to paycheck.

There seems to be a difference between living "paycheck to paycheck" and being poor. Being poor is someone who cannot save and has absolutely no savings at all (retirement or otherwise). A person who is poor has absolutely no recourse for paying bills if they lose their job (no 401K or equity in house to borrow on). Apparently "paycheck to paycheck" means something like using your whole paycheck for expenses (including the retirement fund).

I think that if a person has substantial equity in their house and any savings accumulated, they have a buffer and are not poor. Maybe the question should be more about total net worth . . . like is your total net worth zero or less? ??

I'm the PP you quoted and agree with your assessment. To answer your question, I had a negative net worth for years because my property was (and still remains) underwater. However, my retirement savings has grown and my high consumer debt has been cut in half, so I have a positive net worth. If I lost my job, I'd be in trouble, as I have 401K loan that I couldn't pay in full. So, yes, I'm paycheck to paycheck, though I won't be a year from now.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I do not and this is the primary reason I don't own a home. I don't want to be living paycheck to paycheck. Rent is $700 a month cheaper than owning the same home and that does not include unexpected repairs.

I want to applaud you. You seem to be one of the few sensible ones on this thread. Everyone wants a luxurious life and then they wonder why they are living paycheck to paycheck.

Owning a house is a luxury, owning or leasing two new cars is a luxury, vacations are luxury, eating out is a luxury, private schools is a luxury, getting your mani-pedi-facial-bikini wax and coloring your hair in a salon is a luxury, buying brand name anything when generic is available is a luxury, buying new furniture when second hand furniture is available is a luxury, having electronic devices for entertainment is luxury, having cable and magazine subsription is a luxury, keeping a non-working pet is a luxury.

So, if you are unable to dial back on any of your luxurious spendings then you should not think that you are living paycheck to paycheck. You are just blowing away your retirement and children's college funds, because you want a luxurious life now.

But some of us live in a shitty suburb and share 1 old car, with our college furniture, undyed hair etc. I started out with student loan debt, then spouse got hurt (not at work) and expensive surgery and 6 months of unemployment followed. It's hard to get out of the red, even if you skip the luxuries.

+1

I was one of those people who got caught up in the housing bubble and ended up buying a house at a young age. So ended up living from paycheck to paycheck for a while. I remember prior to that I didn't understand why some of my coworkers were happy for those months that had three pay periods but understood soon afterwards.

I go back and forth on it. Where sometimes I think I bought too young and could've waited but that is with hindsight and knowing that housing prices went back down. Back then there was the concern of being priced out of the market. But at the same time there are those advantages of homeownership.

One of the hard parts is having friends who are rich and didn't understand why I stopped hanging out with them for a period. To them dropping $100/night or just making a sudden trip to Las Vegas is nothing. And they never understand when I tell them why I dropped out of sight for a period back then and still can't do the things that they do now. Different worlds I guess.

Yep, me but most of my bills were related to college expenses.

I never have--even when I was waitressing and paying my own way through college. I always found living situations that were well below my means and then continued to have roommates ten years out of college. I understand when job loss or medical bills cause someone to have to live paycheck to paycheck. I don't understand people doing so rather than cutting back their expenses (such as by renting instead of buying, renting out a room from their house, having roommates if single, living in a smaller house/apartment, etc).

Anonymous wrote:

Anonymous wrote:I do not and this is the primary reason I don't own a home. I don't want to be living paycheck to paycheck. Rent is $700 a month cheaper than owning the same home and that does not include unexpected repairs.

I want to applaud you. You seem to be one of the few sensible ones on this thread. Everyone wants a luxurious life and then they wonder why they are living paycheck to paycheck.

Owning a house is a luxury, owning or leasing two new cars is a luxury, vacations are luxury, eating out is a luxury, private schools is a luxury, getting your mani-pedi-facial-bikini wax and coloring your hair in a salon is a luxury, buying brand name anything when generic is available is a luxury, buying new furniture when second hand furniture is available is a luxury, having electronic devices for entertainment is luxury, having cable and magazine subsription is a luxury, keeping a non-working pet is a luxury.

So, if you are unable to dial back on any of your luxurious spendings then you should not think that you are living paycheck to paycheck. You are just blowing away your retirement and children's college funds, because you want a luxurious life now.

But some of us live in a shitty suburb and share 1 old car, with our college furniture, undyed hair etc. I started out with student loan debt, then spouse got hurt (not at work) and expensive surgery and 6 months of unemployment followed. It's hard to get out of the red, even if you skip the luxuries.

The phrase "paycheck to paycheck" could be viewed as a microaggression. Just an FYI.

Anonymous wrote:

Anonymous wrote:We do. HHI around $250k. I won't cut retirement, but will the 529s. After having kids I have no money.

If you are contributing to retirement, you are not living paycheck to paycheck.

On 250 you are paycheck to paycheck? Do you have an enormous mortgage or debt?

Anonymous wrote:I also have an unemployed spouse so there's little to nothing left over each month. Third time in 10 years this has happened, we manage to build our savings and he loses his job and the cycle repeats.

This is my story, make it 4 layoffs.
Deplete savings, get back on track and then a layoff.

Count me in as living paycheck to paycheck. No vacations, Starbucks, ect. Nice to know I'm not the only one. It's easy to feel like a failure in this area where it seems every single person is rich or came from a wealthy background and received lots of help from family.

We have been. Things get tight, then we see our way clear, then get tight again....really emergencies and repairs. We are trying to come up with a good formula to have a solid savings that we do not touch. It's a process.

It's saddening to see how often medical issues come up as the big money suck. When our son was diagnosed with special needs, I was amazed at how much we paid out of pocket even with the "good" insurance. We were able to tap into some savings, but without that we'd be a difficult position now. Medical expenses should never put someone in a precarious financial position. One can dream, I guess.

Anonymous wrote:

Anonymous wrote:We do. HHI around $250k. I won't cut retirement, but will the 529s. After having kids I have no money.

If you are contributing to retirement, you are not living paycheck to paycheck.

Hmm, I dunno. DH and I contribute to retirement and a tiny amount to 529s. (The latter we just started, 9 years into parenthood.) But we don't have emergency savings and we run out of money every month. Our CC bill is approaching 9k. We earn 160k together, which should be fine, but we live in DC. I think we still qualify.

I also have an unemployed spouse so there's little to nothing left over each month. Third time in 10 years this has happened, we manage to build our savings and he loses his job and the cycle repeats.